Eight Things About Replacing Obamacare That Were Confirmed At The GOP Philly Retreat

Republicans traveled up the I-95 corridor from D.C. to Philadelphia this week to hold their annual policy retreat. The meeting included a discussion on the grand strategy to “repeal and replace” Obamacare, portions of which were recorded and leaked anonymously to the Washington Post and other media outlets.

The excerpts are interesting, not because there were stunning disclosures or revolutionary ideas, but to the contrary they reveal what many have been saying for some time: there is no plan that will enable the Republican Congress to effectively replace Obamacare by relying solely on conservative, market-based solutions...at least not without risking great disruption to an already skittish insurance market.

U.S. President Donald Trump addresses a Republican retreat in Philadelphia on January 26, 2017. (Photo credit should read NICHOLAS KAMM/AFP/Getty Images)

Here are eight things that were made clear by the candid, supposedly private, discussions at the GOP meeting:

Surprise! There is no existing legislation that will effectively replace the health coverage expansion spurred by Obamacare. There are ideas, concepts, blueprints, etc. that are largely based upon Paul Ryan’s House Republican working group from the last Congress. His proposal includes interstate insurance competition, expanded health savings accounts and refundable tax credits to middle-class taxpayers. But without mandates to broaden the coverage pool or subsidies to reduce premium costs, the insurance markets will not offer affordable policies to those who are not reasonably healthy or wealthy.

The Trump administration talks a good game, doubling down in recent days by proclaiming that there will be a contemporaneous replacement plan under which every American should have health insurance coverage, but offering no particulars as to what the new program will encompass. Trump domestic policy council chair Andrew Bremberg attended the discussion, but “offered little detail in the session about particular executive actions...or legislative proposals” according to the Washington Post’s synopsis. If he is not in a position to offer ideas in an ostensibly private policy retreat with members of his own party, one might reasonably conclude that they don’t exist.

The Obamacare exchanges will be history if the GOP is unable to develop an effective replacement plan that covers them and get the votes to pass it. The Democrats have made clear that Republicans should not expect their cooperation or support if there is a quick move to repeal, so where will the votes come from to get 60 Senators to support a replacement that cannot be enacted in its entirety under budget reconciliation?

There is no consensus on whether to continue the federal subsidies that induced a number of states to expand eligibility for low-income residents to gain Medicaid coverage. “These are decisions we haven’t made yet,” said House Energy & Commerce Committee Chair Greg Walden (R-Ore.). Related to this, there is ongoing consideration of turning Medicaid into a block grant program under which each state would receive federal funds and determine eligibility requirements and program management.

Many Republicans are concerned about coverage gaps and insurance market disruption that could result from the rush to repeal without an effective replacement, and the political fallout that would be laid at their feet. Tom McClintock, a House member from California, suggested that they were about to create what he called “Trumpcare.” His comments bring to mind Colin Powell’s infamous "Pottery Barn rule" uttered in the lead-up to the invasion of Iraq: if you break it, you own it.

There is interest in some quarters in trying to address the current inequity that flows from the preferential tax treatment enjoyed by employees who get their coverage from their employer, and those who do not. Remember that about half of all Americans receive health insurance from their employers in a tax-advantaged arrangement that allows employers to deduct the payments they make on behalf of their employees, and the employees to receive those benefits without paying taxes on them. This privilege does not extend to those who work for themselves, or for small employers who did not provide coverage prior to the ACA mandate. The tax benefits amount to a lot of lost revenue that could be used to maintain expanded coverage: there is “a tax break on employer-sponsored healthcare and nowhere else” equal to $3.6 trillion over 10 years, said House Ways and Means Committee Chair Kevin Brady.

Politics trumps policy. There are many examples of this, of course, but among others House member John Faso of New York voiced concerns about linking the defunding of Planned Parenthood to the repeal of Obamacare, especially given the the need to work with Democrats due to the inability to fully repeal and replace the ACA under budget reconciliation rules. “If you want to do it somewhere else, I have no problem, but I think we are creating a political minefield for ourselves."

There remain a few sensible adults in the room. Senate Health Committee Chair Lamar Alexander (R-Tenn.) and newly reelected Senator Rob Portman (R-Ohio) reminded colleagues that the policy goals remain as they have always been: to assure broad coverage for Americans and to reduce the overall cost of healthcare. But how to achieve these goals, now there’s the rub.

House Speaker Paul Ryan (R-Wis.) discusses the release of the House Republican plank on health care reform at the American Enterprise Institute for Public Policy Research on June 22, 2016 in Washington, D.C. (Photo by Allison Shelley/Getty Images)

It is fascinating to observe the spectacle of politicians struggling to adhere to ideological principles that simply cannot be reconciled with the facts on the ground. House Speaker Ryan has said that since Obamacare, “Insurance markets are collapsing. Premiums are soaring. Patients’ choices are dwindling.” Republicans despise federal government mandates and subsidies. But in their honest reflections, they know that Obamacare can’t be fixed without them and that their "replacement" plans will not meaningfully help those that cannot otherwise afford health insurance.